• Enterprise Bancorp, Inc. Announces Third Quarter Financial Results

    来源: Nasdaq GlobeNewswire / 20 10月 2022 16:02:41   America/New_York

    LOWELL, Mass., Oct. 20, 2022 (GLOBE NEWSWIRE) -- Enterprise Bancorp, Inc. (NASDAQ: EBTC), parent of Enterprise Bank, announced net income for the three months ended September 30, 2022, of $12.0 million, or $0.98 per diluted common share, compared to $9.8 million, or $0.81 per diluted common share, for the three months ended September 30, 2021.

    Chief Executive Officer Jack Clancy commented, "Our third quarter operating results were very positive, highlighted by strong growth in net interest income during the period resulting primarily from strong loan and deposit growth of 15% (excluding PPP loans, non-GAAP) and 4%, respectively, over the last twelve months and from higher interest rates."

    Executive Chairman & Founder George Duncan commented, "Other significant items during the third quarter
    were the dividend declaration of $0.205 per share on October 18th, an increase of 11% over the prior year period, and the Company's recognition at the Boston Business Journal's Corporate Citizenship Summit on September 8, 2022. We ranked 2nd for the highest average hours of community service and 43rd among the largest corporate donors in Massachusetts. I am personally very proud of this team accomplishment. Our commitment to the communities we serve in Massachusetts and New Hampshire is entrenched in our culture and reflects our deep sense of purpose as a genuine community bank. It is one of our key operating principles and strategies, along with our dedication to diversity, equity and inclusion, contiguous organic expansion into strong commercial markets, ongoing investment in our team members, and continuous strengthening of our digital security and capabilities."

    Net Income
    Net income for the three months ended September 30, 2022, amounted to $12.0 million, an increase of $2.1 million, or 22%, compared to the prior year period.

    • The increase in net income was due primarily to increases in net interest income of $3.9 million and non-interest income of $1.4 million, partially offset by increases in the provision for credit losses of $972 thousand and non-interest expense of $1.8 million.
    • Non-interest income for the prior year quarter was impacted by a loss of $1.8 million on the termination of swaps. Excluding this charge, non-interest income decreased $402 thousand compared to the prior year quarter.
    • For the three months ended September 30, 2022, the effective tax rate was 24.1%, compared to 25.3% for the three months ended September 30, 2021. Tax expense for the three months ended September 30, 2022, benefited from a lower effective tax rate compared to the prior year period due to increases in tax-exempt income and lower-taxed income at the Bank's security corporation subsidiaries.

    Net Interest Income
    Net interest income for the three months ended September 30, 2022, amounted to $39.8 million, an increase of $3.9 million, or 11%, compared to the three months ended September 30, 2021.

    • The increase in net interest income was due largely to increases in loan income, excluding Paycheck Protections Program ("PPP") income (non-GAAP), of $6.3 million, investment security income of $835 thousand, and other interest-earning asset income of $1.8 million, partially offset by a decrease in PPP income of $4.5 million and an increase in deposit interest expense of $598 thousand.
    • PPP income amounted to $437 thousand for the three months ended September 30, 2022, compared to $4.9 million for the three months ended September 30, 2021. PPP loans outstanding amounted to $2.7 million at September 30, 2022, compared to $148.2 million at September 30, 2021, due to the continued forgiveness of PPP loans by the Small Business Administration (the "SBA") during the period.

    Net Interest Margin
    Tax-equivalent net interest margin ("net interest margin") was 3.61% for the three months ended September 30, 2022, compared to 3.45% and 3.39% for the three months ended June 30, 2022 and September 30, 2021, respectively.

    Key items impacting net interest margin for the three months ended September 30, 2022, compared to the prior year period, included:

    • Average interest-earning deposits with banks decreased $302.9 million, or 45%, while the yield increased 202 basis points. The decrease in average balance resulted primarily from the funding of growth in the Company's higher yielding investment and core loan portfolios, partially offset by funds received from the forgiveness of PPP loans by the SBA. The increase in yield reflected higher market interest rates during the first nine months of 2022.
    • Average investment securities increased $274.2 million, or 40%, while the tax-equivalent yield decreased 35 basis points. The changes in average balance and yield resulted from investment security purchases in the second half of 2021 when market interest rates were lower than the current period.
    • Average loans increased $193.7 million, or 7%, while the tax-equivalent yield decreased 4 basis points, due primarily to the decrease in PPP income.
      • Average PPP loans outstanding decreased $216.5 million, or 97%, due to the continued forgiveness of PPP loans by the SBA during the period.
      • Average core loans (non-GAAP) increased $410.2 million, or 15%, and the yield increased 25 basis points. Core loan yields have benefited primarily from increases in the prime lending rate of 300 basis points between March and September of 2022.
    • Average total deposits increased $153.9 million, or 4%, and the yield increased 5 basis points.
    • Adjusted net interest margin (non-GAAP), amounted to 3.71% and 3.68%, respectively.
    • Adjusted net interest margin (non-GAAP) for the three months ended June 30, 2022, as disclosed in the prior quarter earnings release, amounted to 3.55%.

    Provision for Credit Losses
    The provision for credit losses for the three months ended September 30, 2022, amounted to $1.0 million, compared to $28 thousand for the three months ended September 30, 2021.

    • The provision for the three months ended September 30, 2022, consisted of $560 thousand for loans outstanding and $440 thousand for reserves on unfunded commitments (included in other liabilities).
    • The majority of the provision for credit losses during the third quarter of 2022 related to growth in the Company's loan portfolio and in off-balance sheet commitments related primarily to commercial construction lending.

    Non-Interest Income
    Non-interest income for the three months ended September 30, 2022, amounted to $4.5 million, an increase of $1.4 million, or 47%, compared to the three months ended September 30, 2021.

    • Non-interest income in the prior year period included a loss on termination of swaps of $1.8 million. Excluding this item, non-interest income decreased $402 thousand, or 8%, resulting primarily from decreases in wealth management fees of $142 thousand, gains on sales of loans of $169 thousand, losses on equity securities of $199 thousand, and other income of $176 thousand, partially offset by an increase in deposit and interchange fees of $232 thousand.

    Non-Interest Expense
    Non-interest expense for the three months ended September 30, 2022, amounted to $27.5 million, an increase of $1.8 million, or 7%, compared to the three months ended September 30, 2021.

    • The increase in non-interest expense over the respective periods resulted primarily from increases in salaries and employee benefits of $1.7 million and other operating expenses of $275 thousand, partially offset by a decrease in occupancy and equipment expenses of $268 thousand.

    Credit Quality
    The allowance for credit losses ("ACL") for loans amounted to $51.2 million, or 1.65% of total loans, at September 30, 2022, compared to $47.7 million, or 1.63% of total loans, at December 31, 2021. The reserve for unfunded commitments (included in other liabilities) amounted to $4.1 million at September 30, 2022, compared to $3.7 million at December 31, 2021. The Company continues to closely monitor credit quality as concerns regarding forecasted economic conditions worsen due to the rising interest rate environment and persistent high inflation levels in our market areas and the United States.

    Net charge-offs for the three months ended September 30, 2022, amounted to $52 thousand, compared to $2.1 million for the three months ended September 30, 2021. Net charge-offs for the three months ended September 30, 2021, related primarily to two individually evaluated commercial loans, which were fully reserved for prior to 2021.

    Non-performing assets amounted to $5.7 million, or 0.13% of total assets, at September 30, 2022, compared to $26.5 million, or 0.60% of total assets, at December 31, 2021. The decrease in non-performing assets was due primarily to two commercial relationships, amounting to $17.9 million, which were upgraded and restored to accrual status during the second quarter of 2022, due to improved financial strength and consistent payment history.

    Balance Sheet
    Total assets amounted to $4.53 billion at September 30, 2022, compared to $4.45 billion at December 31, 2021, an increase of $82.0 million, or 2%.

    Total interest-earning deposits with banks amounted to $368.3 million at September 30, 2022, compared to $403.0 million at December 31, 2021, a decrease of $34.7 million, or 9%.

    Total investment securities at fair value amounted to $831.0 million at September 30, 2022, compared to $958.2 million at December 31, 2021, a decrease of $127.2 million, or 13%. The change resulted primarily from a decline in the fair value of the Company's debt securities portfolio of $129.6 million during the period. Management has concluded that the unrealized losses resulted from significant increases in market interest rates during the first nine months of 2022 and that no allowance for credit losses was considered necessary as of September 30, 2022.

    Total loans amounted to $3.11 billion at September 30, 2022, compared to $2.92 billion at December 31, 2021, an increase of $188.7 million, or 6%.

    • Core loans (non-GAAP) increased $257.5 million, or 9%, over the respective periods. Included in the loan growth for the period was $64.7 million in retained residential mortgages.

    Customer deposits amounted to $4.14 billion at September 30, 2022, compared to $3.98 billion at December 31, 2021, an increase of $157.8 million, or 4%.

    Shareholders' Equity & Regulatory Capital
    Total shareholders' equity amounted to $272.2 million at September 30, 2022, compared to $346.9 million at December 31, 2021, a decrease of $74.7 million, or 22%. The change was attributable primarily to a decrease in accumulated other comprehensive income ("AOCI") of $100.3 million since December 31, 2021, partially offset by an increase in retained earnings of $23.0 million over the same period. The change in AOCI resulted from a decrease in the fair value of debt securities, which is attributed to the significant increase in market interest rates during the period. The Company classifies all debt securities as available-for-sale and anticipates they will mature or be called at par value.

    The Company's reported book value per common share and return on average shareholders' equity ratios were impacted by the change in AOCI as follows:

    • Book value per common share was $22.44 at September 30, 2022, compared to $28.82 at December 31, 2021, a decrease of 22%. Excluding AOCI (non-GAAP), book value per common share was $30.33 at September 30, 2022 and $28.43 at December 31, 2021, an increase of 7%.
    • Return on average shareholders' equity was 16.47% and 12.56% for the quarters ended September 30, 2022, and December 31, 2021, respectively. Return on average shareholders' equity, excluding AOCI (non-GAAP), was 12.95% and 12.69% for the quarters ended September 30, 2022, and December 31, 2021, respectively.

    Total Capital and Tier 1 Capital to risk weighted assets, of which AOCI is not of component, amounted to 13.49% and 10.52%, respectively, at September 30, 2022 compared to 13.73% and 10.62%, respectively, at December 31, 2021. The decrease in each ratio was due primarily to strong core loan growth (non-GAAP) over the respective periods, which require higher capital reserves than interest-earning deposits with banks.

    Tier 1 Capital to average assets, of which AOCI is not a component, amounted to 7.89% at September 30, 2022, compared to 7.56% at December 31, 2021. The increase was driven primarily by the increase in retained earnings noted above, partially offset by an increase in average assets.

    Wealth Management
    Wealth assets under management and wealth assets under administration, which are not carried as assets on the Company's consolidated balance sheets, amounted to $835.7 million and $186.0 million, respectively, at September 30, 2022, representing decreases of $205.7 million, or 20%, and $71.9 million, or 28%, respectively, compared to December 31, 2021. The decreases in wealth assets under management and wealth assets under administration were attributable primarily to declines in market values during the nine months ended September 30, 2022.

    Non-GAAP Measures
    Throughout this press release, certain measures have been adjusted to provide what management believes are more meaningful comparisons between periods. The items principally impacted and reported as non-GAAP were loans (PPP loans), liquidity (interest-earning deposits with banks), shareholders' equity (AOCI), and any related measures presented. We refer to any measure that excludes PPP loans as "core" and any measure that excludes PPP loans and interest-earning deposits with banks as "adjusted." The activity which resulted in the Company's use of non-GAAP measures consisted of: (1) the Company's origination of over $715 million in short-term PPP loans between April 2020 and May 2021; (2) forgiveness of PPP loans by the SBA which began in November 2020 and continued through the current period, and approximately 99.6% of the principal balance of PPP loans originated by the Company has been forgiven by the SBA through September 30, 2022; (3) liquidity, carried as lower-yielding interest-earning deposits with banks, had increased significantly following the trends in customer deposits and PPP loan forgiveness by the SBA over the past two years; and (4) the significant increase in market interest rates during the first nine months of 2022 has resulted in unrealized losses in the Company's available-for-sale debt securities portfolio at September 30, 2022 of $123.7 million and an accumulated other comprehensive loss, included in shareholder's equity, of $95.7 million. The tables beginning on page 12 of this press release provide a reconciliation of the non-GAAP measures to the information presented under U.S. generally accepted accounting principles ("GAAP").

    About Enterprise Bancorp, Inc.
    Enterprise Bancorp, Inc. is a Massachusetts corporation that conducts substantially all its operations through Enterprise Bank and Trust Company, commonly referred to as Enterprise Bank, and has reported 132 consecutive profitable quarters. Enterprise Bank is principally engaged in the business of attracting deposits from the general public and investing in commercial loans and investment securities. Through Enterprise Bank and its subsidiaries, the Company offers a range of commercial, residential and consumer loan products, deposit products and cash management services, electronic and digital banking options, as well as wealth management, and trust services. The Company's headquarters and Enterprise Bank's main office are located at 222 Merrimack Street in Lowell, Massachusetts. The Company's primary market area is the Northern Middlesex, Northern Essex, and Northern Worcester counties of Massachusetts and the Southern Hillsborough and Southern Rockingham counties in New Hampshire. Enterprise Bank has 27 full-service branches located in the Massachusetts communities of Acton, Andover, Billerica (2), Chelmsford (2), Dracut, Fitchburg, Lawrence, Leominster, Lexington, Lowell (2), Methuen, North Andover, Tewksbury (2), Tyngsborough and Westford and in the New Hampshire communities of Derry, Hudson, Londonderry, Nashua (2), Pelham, Salem and Windham.

    Forward-Looking Statements
    This earnings release contains statements about future events that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by references to a future period or periods or by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "will," "should," "plan," and other similar terms or expressions. Forward-looking statements should not be relied on because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Company. These risks, uncertainties, and other factors may cause the actual results, performance, and achievements of the Company to be materially different from the anticipated future results, performance or achievements expressed in, or implied by, the forward-looking statements. Factors that could cause such differences include, but are not limited to, general economic conditions, the impact of the ongoing COVID-19 pandemic and any current or future variants thereof, changes in market interest rates, the persistence

    of the current inflationary environment in our market areas and the United States, the uncertain impacts of
    quantitative tightening and current and future monetary policies of the Federal Reserve, regulatory considerations, competition and market expansion opportunities, changes in non-interest expenditures or in the anticipated benefits of such expenditures, the receipt of required regulatory approvals, changes in tax laws, and current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of our participation in and execution of government programs related to the COVID-19 pandemic and any current or future variants thereof. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. For more information about these factors, please see our reports filed with or furnished to the U.S. Securities and Exchange Commission (the "SEC"), including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Any forward-looking statements contained in this earnings release are made as of the date hereof, and we undertake no duty, and specifically disclaim any duty, to update or revise any such statements, whether as a result of new information, future events or otherwise, except as required by applicable law.


    ENTERPRISE BANCORP, INC.
    Consolidated Balance Sheets
    (unaudited)

    (Dollars in thousands, except per share data) September 30,
    2022    		 December 31,
    2021
    Assets    
    Cash and cash equivalents:    
    Cash and due from banks $45,345  $33,572 
    Interest-earning deposits with banks  368,343   403,004 
    Total cash and cash equivalents  413,688   436,576 
    Investments:    
    Debt securities at fair value (amortized cost of $950,881 and $950,523, respectively)  827,215   956,430 
    Equity securities at fair value  3,815   1,785 
    Total investment securities at fair value  831,030   958,215 
    Federal Home Loan Bank ("FHLB") stock  2,343   2,164 
    Loans:    
    Total loans  3,109,369   2,920,684 
    Allowance for credit losses  (51,211)  (47,704)
    Net loans  3,058,158   2,872,980 
    Premises and equipment, net  44,141   44,689 
    Lease right-of-use asset  24,559   24,295 
    Accrued interest receivable  15,746   13,354 
    Deferred income taxes, net  51,692   19,644 
    Bank-owned life insurance  63,847   62,954 
    Prepaid income taxes  1,205   279 
    Prepaid expenses and other assets  17,755   7,013 
    Goodwill  5,656   5,656 
    Total assets $4,529,820  $4,447,819 
    Liabilities and Shareholders' Equity    
    Liabilities    
    Deposits $4,138,038  $3,980,239 
    Borrowed funds  2,934   5,479 
    Subordinated debt  59,102   58,979 
    Lease liability  24,020   23,627 
    Accrued expenses and other liabilities  32,700   31,063 
    Accrued interest payable  833   1,537 
    Total liabilities  4,257,627   4,100,924 
    Commitments and Contingencies    
    Shareholders' Equity    
    Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued  —   — 
    Common stock, $0.01 par value per share; 40,000,000 shares authorized; 12,127,453 and 12,038,382 shares issued and outstanding, respectively  121   120 
    Additional paid-in capital  103,007   100,352 
    Retained earnings  264,738   241,761 
    Accumulated other comprehensive (loss) income  (95,673)  4,662 
    Total shareholders' equity  272,193   346,895 
       Total liabilities and shareholders' equity $4,529,820  $4,447,819 



    ENTERPRISE BANCORP, INC.
    Consolidated Statements of Income
    (unaudited)

       Three months ended   Nine months ended
      September 30, September 30,
    (Dollars in thousands, except per share data) 2022
    		 2021
    		 2022
    		 2021
    Interest and dividend income:            
    Loans and loans held for sale $        35,306  $        33,420  $        98,149  $        100,730 
    Investment securities 4,728  3,893  14,097  10,715 
    Other interest-earning assets 2,068  262  2,642  471 
    Total interest and dividend income 42,102  37,575  114,888  111,916 
    Interest expense:            
    Deposits 1,460  862  2,731  3,295 
    Borrowed funds 13  17  39  43 
    Subordinated debt 850  817  2,485  2,677 
    Total interest expense 2,323  1,696  5,255  6,015 
    Net interest income 39,779  35,879  109,633  105,901 
    Provision for credit losses 1,000  28  3,939  747 
    Net interest income after provision for credit losses 38,779  35,851  105,694  105,154 
    Non-interest income:            
    Wealth management fees 1,626  1,768  4,965  5,018 
    Deposit and interchange fees 2,045  1,813  5,847  5,070 
    Income on bank-owned life insurance, net 303  250  893  518 
    Net gains on sales of debt securities —  —  1,062  128 
    Net gains on sales of loans 8  177  30  795 
    Loss on termination of swaps —  (1,847)  —  (1,847) 
    (Loss) gain on equity securities (193)  6  (688)  154 
    Other income 736  912  2,143  2,294 
    Total non-interest income 4,525  3,079  14,252  12,130 
    Non-interest expense:            
    Salaries and employee benefits 18,915  17,224  53,450  49,377 
    Occupancy and equipment expenses 2,203  2,471  6,982  7,268 
    Technology and telecommunications expenses 2,599  2,583  8,154  7,877 
    Advertising and public relations expenses 510  435  1,737  1,602 
    Audit, legal and other professional fees 693  558  2,078  1,702 
    Deposit insurance premiums 391  593  1,313  1,327 
    Supplies and postage expenses 219  200  663  605 
    Loss on extinguishment of subordinated debt —  —  —  713 
    Other operating expenses 2,007  1,705  5,770  5,138 
    Total non-interest expense 27,537  25,769  80,147  75,609 
    Income before income taxes 15,767  13,161  39,799  41,675 
    Provision for income taxes 3,805  3,329  9,389  10,352 
       Net income $        11,962  $        9,832  $        30,410  $        31,323 
                 
    Basic earnings per common share $        0.99  $        0.82  $        2.51  $        2.61 
    Diluted earnings per common share $        0.98  $        0.81  $        2.50  $        2.60 
                 
    Basic weighted average common shares outstanding 12,119,348  12,022,610  12,094,613  11,997,199 
    Diluted weighted average common shares outstanding 12,156,695  12,065,100  12,143,468  12,038,561 



    ENTERPRISE BANCORP, INC.
    Selected Consolidated Financial Data and Ratios
    (unaudited)

      At or for the three months ended
    (Dollars in thousands, except per share data) September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021
    Balance Sheet Data          
    Total cash and cash equivalents $413,688  $306,460  $429,687  $436,576  $644,377 
    Total investment securities at fair value  831,030   866,580   910,013   958,215   819,222 
    Total loans  3,109,369   3,084,915   2,962,721   2,920,684   2,848,110 
    Allowance for credit losses  (51,211)  (50,703)  (48,424)  (47,704)  (47,262)
    Total assets  4,529,820   4,417,447   4,454,474   4,447,819   4,451,432 
    Total deposits  4,138,038   4,016,814   4,034,500   3,980,239   3,970,936 
    Subordinated debt  59,102   59,039   59,009   58,979   58,949 
    Total shareholders' equity  272,193   285,110   310,539   346,895   346,540 
    Total liabilities and shareholders' equity  4,529,820   4,417,447   4,454,474   4,447,819   4,451,432 
               
    Wealth Management          
    Wealth assets under management $835,661  $849,536  $961,491  $1,041,409  $966,180 
    Wealth assets under administration $185,977  $205,646  $243,247  $257,867  $235,002 
               
    Shareholders' Equity Ratios          
    Book value per common share $22.44  $23.53  $25.66  $28.82  $28.81 
    Dividends paid per common share $0.205  $0.205  $0.205  $0.185  $0.185 
               
    Regulatory Capital Ratios          
    Total capital to risk weighted assets  13.49%  13.38%  13.72%  13.73%  14.16%
    Tier 1 capital to risk weighted assets(1)  10.52%  10.38%  10.65%  10.62%  10.94%
    Tier 1 capital to average assets  7.89%  8.03%  7.83%  7.56%  7.42%
               
    Credit Quality Data          
    Non-performing loans $5,717  $6,321  $25,173  $26,522  $27,835 
    Other real estate owned  —   —   —   —   2,400 
    Non-performing assets $5,717  $6,321  $25,173  $26,522  $30,235 
    Non-performing loans to total loans  0.18%  0.20%  0.85%  0.91%  0.98%
    Non-performing assets to total assets  0.13%  0.14%  0.57%  0.60%  0.68%
    ACL for loans to total loans  1.65%  1.64%  1.63%  1.63%  1.66%
    ACL for loans to total core loans (non-GAAP)(2)  1.65%  1.65%  1.65%  1.67%  1.75%
               
    Income Statement Data          
    Net interest income $39,779  $35,821  $34,033  $35,655  $35,879 
    Provision for credit losses  1,000   2,409   530   1,023   28 
    Total non-interest income  4,525   4,132   5,595   5,977   3,079 
    Total non-interest expense  27,537   26,853   25,757   26,526   25,769 
    Income before income taxes  15,767   10,691   13,341   14,083   13,161 
    Provision for income taxes  3,805   2,530   3,054   3,235   3,329 
    Net income $11,962  $8,161  $10,287  $10,848  $9,832 
               
    Income Statement Ratios          
    Diluted earnings per common share $0.98  $0.67  $0.85  $0.90  $0.81 
    Return on average total assets  1.05%  0.76%  0.95%  0.97%  0.88%
    Return on average shareholders' equity  16.47%  11.24%  12.56%  12.56%  11.30%
    Net interest margin (tax-equivalent)(3)  3.61%  3.45%  3.28%  3.34%  3.39%

    (1)  Ratio also represents common equity tier 1 capital to risk weighted assets as of the periods presented.
    (2)  See non-GAAP measures table below for PPP-adjusted balances referred to as core.
    (3)  Tax-equivalent net interest margin is net interest income adjusted for the tax-equivalent effect associated with tax-exempt loan and investment income, expressed as a percentage of average interest-earning assets.



    ENTERPRISE BANCORP, INC.
    Consolidated Loan and Deposit Data
    (unaudited)

    Major classifications of loans at the dates indicated were as follows:

    (Dollars in thousands) September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021
    Commercial real estate $1,886,365  $1,865,198  $1,779,691  $1,680,792  $1,556,240 
    Commercial and industrial  413,347   422,006   408,341   412,070   401,718 
    Commercial construction  396,027   385,752   375,709   410,443   412,332 
    SBA PPP  2,725   15,288   32,153   71,502   148,240 
    Total commercial loans  2,698,464   2,688,244   2,595,894   2,574,807   2,518,530 
               
    Residential mortgages  321,663   307,131   280,507   256,940   239,960 
    Home equity loans and lines  80,882   81,648   78,557   80,467   81,217 
    Consumer  8,360   7,892   7,763   8,470   8,403 
    Total retail loans  410,905   396,671   366,827   345,877   329,580 
    Total loans  3,109,369   3,084,915   2,962,721   2,920,684   2,848,110 
               
    ACL for loans  (51,211)  (50,703)  (48,424)  (47,704)  (47,262)
    Net loans $3,058,158  $3,034,212  $2,914,297  $2,872,980  $2,800,848 


    Deposits are summarized as follows as of the periods indicated:

    (Dollars in thousands) September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021
    Non-interest checking $1,441,104  $1,457,220  $1,444,047  $1,364,258  $1,404,353 
    Interest-bearing checking  719,474   712,898   718,107   743,587   713,991 
    Savings  351,665   334,728   334,923   310,244   294,143 
    Money market  1,395,756   1,293,453   1,337,670   1,355,701   1,344,116 
    CDs $250,000 or less  163,520   144,084   149,309   154,403   160,810 
    CDs greater than $250,000  66,519   74,431   50,444   52,046   53,523 
    Deposits $4,138,038  $4,016,814  $4,034,500  $3,980,239  $3,970,936 



    ENTERPRISE BANCORP, INC.
    Consolidated Average Balance Sheets and Yields (tax-equivalent basis)
    (unaudited)

    The following table presents the Company's average balance sheets, net interest income and average rates for the three months ended September 30, 2022 and 2021:

      Three months ended September 30, 2022 Three months ended September 30, 2021
    (Dollars in thousands) Average
    Balance    		 Interest(1) Average
    Yield(1)    		 Average
    Balance    		 Interest(1) Average
    Yield(1)
    Assets:            
    Loans and loans held for sale(2) (tax-equivalent) $3,085,896 $35,422 4.56% $2,892,192 $33,540 4.60%
    Investment securities(3) (tax-equivalent)  954,385  4,959 2.08%  680,164  4,125 2.43%
    Other interest-earning assets(4)  375,213  2,068 2.19%  677,910  262 0.15%
    Total interest-earnings assets (tax-equivalent)  4,415,494  42,449 3.82%  4,250,266  37,927 3.54%
    Other assets  101,096      181,826    
    Total assets $4,516,590     $4,432,092    
                 
    Liabilities and stockholders' equity:            
    Interest checking, savings and money market $2,444,705  1,045 0.17% $2,327,826  351 0.06%
    CDs  221,827  415 0.74%  219,375  359 0.65%
    Brokered deposits  —  — —%  33,424  152 1.80%
    Borrowed funds  2,940  13 1.77%  8,606  17 0.80%
    Subordinated debt(5)  59,052  850 5.76%  58,931  817 5.55%
    Total interest-bearing funding  2,728,524  2,323 0.34%  2,648,162  1,696 0.26%
    Non-interest checking  1,449,909  — —%  1,381,939  — —%
    Total deposits, borrowed funds and subordinated debt  4,178,433  2,323 0.22%  4,030,101  1,696 0.17%
    Other liabilities  50,034      56,746    
    Total liabilities  4,228,467      4,086,847    
    Stockholders' equity  288,122      345,245    
    Total liabilities and stockholders' equity $4,516,589     $4,432,092    
                 
    Net interest-rate spread (tax-equivalent)     3.48%     3.28%
    Net interest income (tax-equivalent)    40,126      36,231  
    Net interest margin (tax-equivalent)     3.61%     3.39%
    Less tax-equivalent adjustment    347      352  
    Net interest income   $39,779     $35,879  
    Net interest margin     3.58%     3.35%

    (1)  Average yields and interest income are presented on a tax-equivalent basis, calculated using a U.S. federal income tax rate of 21% in both 2022 and 2021, based on tax-equivalent adjustments associated with tax-exempt loans and investments interest income.
    (2)  Average loans and loans held for sale include non-accrual loans and are net of average deferred loan fees.
    (3)  Average investments are presented at average amortized cost.
    (4)  Average other interest-earning assets include interest-earning deposits with banks, federal funds sold and FHLB stock.
    (5)  The subordinated debt is net of average deferred debt issuance costs.



    ENTERPRISE BANCORP, INC.
    Consolidated Average Balance Sheets and Yields (tax-equivalent basis)
    (unaudited)

    The following table presents the Company's average balance sheets, net interest income and average rates for the nine months ended September 30, 2022 and 2021:

      Nine months ended September 30, 2022 Nine months ended September 30, 2021
    (Dollars in thousands) Average
    Balance    		 Interest(1) Average
    Yield(1)    		 Average
    Balance    		 Interest(1) Average
    Yield(1)
    Assets:            
    Loans and loans held for sale(2) (tax-equivalent) $3,006,403 $98,486 4.38% $3,002,404 $101,102 4.50%
    Investment securities(3) (tax-equivalent)  956,921  14,792 2.06%  615,858  11,412 2.47%
    Other interest-earning assets(4)  324,292  2,642 1.09%  490,266  471 0.13%
    Total interest-earnings assets (tax-equivalent)  4,287,616  115,920 3.61%  4,108,528  112,985 3.68%
    Other assets  123,364      165,991    
    Total assets $4,410,980     $4,274,519    
                 
    Liabilities and stockholders' equity:            
    Interest checking, savings and money market $2,371,033  1,880 0.11% $2,221,068  1,203 0.07%
    CDs  207,835  851 0.55%  229,793  1,428 0.83%
    Brokered deposits  —  — —%  60,989  664 1.46%
    Borrowed funds  3,383  39 1.55%  7,742  43 0.75%
    Subordinated debt(5)  59,022  2,485 5.61%  63,754  2,677 5.60%
    Total interest-bearing funding  2,641,273  5,255 0.27%  2,583,346  6,015 0.31%
    Non-interest checking  1,416,050  — —%  1,306,485  — —%
    Total deposits, borrowed funds and subordinated debt  4,057,323  5,255 0.17%  3,889,831  6,015 0.21%
    Other liabilities  50,045      48,834    
    Total liabilities  4,107,368      3,938,665    
    Stockholders' equity  303,612      335,854    
    Total liabilities and stockholders' equity $4,410,980     $4,274,519    
                 
    Net interest-rate spread (tax-equivalent)     3.34%     3.37%
    Net interest income (tax-equivalent)    110,665      106,970  
    Net interest margin (tax-equivalent)     3.45%     3.48%
    Less tax-equivalent adjustment    1,032      1,069  
    Net interest income   $109,633     $105,901  
    Net interest margin     3.42%     3.44%

    (1)  Average yields and interest income are presented on a tax-equivalent basis, calculated using a U.S. federal income tax rate of 21% in both 2022 and 2021, based on tax-equivalent adjustments associated with tax-exempt loans and investments interest income.
    (2)  Average loans and loans held for sale include non-accrual loans and are net of average deferred loan fees.
    (3)  Average investments are presented at average amortized cost.
    (4)  Average other interest-earning assets include interest-earning deposits with banks, federal funds sold and FHLB stock.
    (5)  The subordinated debt is net of average deferred debt issuance costs.



    ENTERPRISE BANCORP, INC.
    Non-GAAP Financial Measures and Reconciliations
    (unaudited)

    NON-GAAP MEASURES
    The accompanying unaudited consolidated interim financial statements have been prepared in accordance with GAAP. However, certain financial measures we present are supplemental measures that are not required by or are not presented in accordance with GAAP. These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company's GAAP financial information. In addition, the non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies; therefore, these measures may not be comparable to other similarly titled measures as presented by other companies.

    The following tables summarize the reconciliation of GAAP to non-GAAP measures related to the impact of PPP loans on total loans and loan interest income:

    (Dollars in thousands) September 30,
    2022    		 June 30,
    2022    		 March 31,
    2022    		 December 31,
    2021    		 September 30,
    2021
    Total Core Loans          
    Total loans $3,109,369  $3,084,915  $2,962,721  $2,920,684  $2,848,110 
    Adjustment: PPP loans  (2,725)  (15,288)  (32,153)  (71,502)  (148,240)
    Total core loans (non-GAAP) $3,106,644  $3,069,627  $2,930,568  $2,849,182  $2,699,870 


      Three months ended Nine months ended
      September 30, September 30,
    (Dollars in thousands)  2022   2021   2022   2021 
    Loan Income Excluding PPP Income        
    Loan income $35,306  $33,420  $98,149  $100,730 
    Adjustment: PPP income  (437)  (4,898)  (2,537)  (16,495)
    Loan income excluding PPP income (non-GAAP) $34,869  $28,522  $95,612  $84,235 
             
    Net Interest Income Excluding PPP Income        
    Net interest income $39,779  $35,879  $109,633  $105,901 
    Adjustment: PPP income  (437)  (4,898)  (2,537)  (16,495)
    Net interest income excluding PPP income (non-GAAP) $39,342  $30,981  $107,096  $89,406 



    ENTERPRISE BANCORP, INC.
    Non-GAAP Financial Measures and Reconciliations (continued)
    (unaudited)

    The following tables summarize the reconciliation of GAAP to non-GAAP measures related to the impact of PPP loans and interest-earning deposits with banks on net interest margin:

      Three months ended Nine months ended
    (Dollars in thousands) September 30,
    2022    		 September 30,
    2021    		 September 30,
    2022    		 September 30,
    2021
    Adjusted Average Interest-Earning Assets        
    Total average interest-earning assets $4,415,494  $4,250,266  $4,287,616  $4,108,528 
    Adjustment: Average PPP loans, net  (7,161)  (223,611)  (26,543)  (361,924)
    Adjustment: Average interest-earning deposits with banks  (372,871)  (675,746)  (322,045)  (488,181)
    Total adjusted average interest-earning assets (non-GAAP) $4,035,462  $3,350,909  $3,939,028  $3,258,423 
             
    Adjusted Net Interest Income        
    Net interest income (tax-equivalent) $40,126  $36,231  $110,665  $106,970 
    Adjustment: PPP income  (437)  (4,898)  (2,537)  (16,495)
    Adjustment: Interest on interest-earning deposits with banks  (2,037)  (254)  (2,588)  (458)
    Adjusted net interest income (tax-equivalent) (non-GAAP) $37,652  $31,079  $105,540  $90,017 
             
    Adjusted Net Interest Margin        
    Net interest margin (tax-equivalent)  3.61%  3.39%  3.45%  3.48%
    Adjustment: PPP effect(1) (0.03)% (0.30)% (0.06)% (0.25)%
    Adjustment: Interest-earning deposits with banks effect(2)  0.13%  0.59%  0.19%  0.46%
    Adjusted net interest margin (tax-equivalent) (non-GAAP)  3.71%  3.68%  3.58%  3.69%

    (1)  PPP loan adjustments include an elimination of average PPP loans, net of deferred SBA fees, as well as interest income on PPP loans and related SBA fee accretion, included in net interest income.
    (2)  Interest-earning deposit adjustments include an elimination of average interest-earning deposits with banks, as well as interest income on interest-earning deposits with banks, included in net interest income.

    The following tables summarize the reconciliation of GAAP to non-GAAP measures related to the impact of AOCI on the Company's reported book value per common share and return on average shareholders' equity:

      At or for the three months ended
    (Dollars in thousands, except per share data) September 30,
    2022    		 December 31,
    2021
    Shareholders' Equity    
    Total shareholders' equity (as reported) $272,193  $346,895 
    Less: accumulated other comprehensive (loss) income  (95,673)  4,662 
    Shareholders' equity excluding AOCI (non-GAAP) $367,866  $342,233 
         
    Book Value Per Common Share    
    Book value per common share (as reported) $22.44  $28.82 
    Book value per common share excluding AOCI (non-GAAP) $30.33  $28.43 
         
    Average Shareholders' Equity    
    Total average shareholders' equity (as reported) $288,122  $342,635 
    Less: average accumulated other comprehensive (loss) income  (78,257)  3,585 
    Average shareholders' equity excluding AOCI (non-GAAP) $366,379  $339,050 
         
    Return on Average Shareholders' Equity    
    Return on average shareholders' equity (as reported)  16.47%  12.56%
    Return on average shareholders' equity excluding AOCI (non-GAAP)  12.95%  12.69%


    Contact Info: Joseph R. Lussier, Executive Vice President, Chief Financial Officer and Treasurer (978) 656-5578


    Primary Logo

分享